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EMC Insurance Group Inc. Reports 2015 Third Quarter and Nine Month Results and Increases Quarterly Cash Dividend

Globe Newswire

Third Quarter Ended September 30, 2015

Operating Income Per Share – $0.31
Net Income Per Share – $0.54
Net Realized Investment Gains Per Share – $0.24
Catastrophe and Storm Losses Per Share – $0.56
Large Losses Per Share – $0.32
GAAP Combined Ratio – 101.8 percent

Nine Months Ended September 30, 2015

Operating Income Per Share – $1.59
Net Income Per Share – $1.96
Net Realized Investment Gains Per Share – $0.37
Catastrophe and Storm Losses Per Share – $1.29
Large Losses Per Share – $0.68
GAAP Combined Ratio – 97.0 percent

2015 Operating Income Guidance – $1.80 to $2.00 per share

DES MOINES, Iowa, Nov. 06, 2015 (GLOBE NEWSWIRE) -- EMC Insurance Group Inc. (NASDAQ:EMCI) today reported operating income of $6.3 million ($0.31 per share) for the third quarter ended September 30, 2015, compared to operating income of $2.5 million ($0.12 per share) for the third quarter of 20141. For the nine months ended September 30, 2015, the Company reported operating income of $32.8 million ($1.59 per share), compared to $11.7 million ($0.58 per share) for the same period in 2014.

Net income, including realized investment gains and losses, totaled $11.2 million ($0.54 per share) for the third quarter of 2015, compared to $2.2 million ($0.11 per share) for the third quarter of 2014. For the nine months ended September 30, 2015, the Company reported net income of $40.3 million ($1.96 per share), compared to $13.8 million ($0.69 per share) for the same period in 2014.

The Company’s GAAP combined ratio was 101.8 percent in the third quarter of 2015, compared to 107.1 percent in the third quarter of 2014. For the first nine months of 2015, the Company’s GAAP combined ratio was 97.0 percent, compared to 105.0 percent in 2014.

“Operating results for the third quarter improved in both segments, continuing the trend experienced in the first half of the year,” stated President and Chief Executive Officer Bruce G. Kelley. “Based on the good results achieved through the first nine months of the year, we now expect to achieve 2015 operating income near the high end of our guidance range.”

Based on results for the first nine months of 2015 and projections for the remainder of the year, management is reaffirming its 2015 operating income guidance in the previous range of $1.80 to $2.00 per share. This guidance is based on a projected GAAP combined ratio of 97.6 percent for the year and investment income consistent with the amount reported in 2014. The load for catastrophe and storm losses has been reduced to 8.6 points from the previous load of 9.5 points; however, the 0.9 point decline in the loss ratio attributable to this reduction was partially offset by an increase in other types of losses.

Kelley continued, “Catastrophe and storm losses are down for the year compared to our long-term average, and we expect the inter-company reinsurance programs announced earlier this week will help reduce the volatility we have historically experienced in our quarterly results due to catastrophe and storm losses.” These reinsurance programs will become effective January 1, 2016, subject to approval by regulatory authorities.

In addition, on November 4, 2015, the board of directors of the Company declared a quarterly cash dividend of $0.19 per share of common stock payable November 24, 2015 to stockholders of record as of November 17, 2015. The $0.19 per share quarterly dividend represents an 11.8 percent increase over the previous quarterly dividend of $0.17 per share, and when combined with the dividend increase implemented during the third quarter, represents a 14.0 percent increase over the previous split-adjusted dividend of $0.1667 per share.

Kelley went on to say, “This double-digit percentage increase of the dividend is a reflection of the good results achieved through the first nine months of the year, and our expectations for the fourth quarter. Our intent is to reward stockholders with an attractive return on their investment--and we have. The Company has paid a quarterly dividend since becoming publicly held in February 1982, and has never reduced its dividend. We remain confident in the strength of our balance sheet to support future dividend payments and continued profitable growth,” concluded Kelley.

In the third quarter, premiums earned increased 5.4 percent to $145.8 million, from $138.3 million in 2014. In the property and casualty insurance segment, premiums earned increased 5.4 percent, with the majority of the increase attributable to rate level increases on renewal business and growth in insured exposures and an increase in retained policies in the commercial lines of business.

In the reinsurance segment, premiums earned increased 5.5 percent, primarily due to growth in the Mutual Reinsurance Bureau underwriting association (MRB), which reported a significant increase in pro rata liability business. The increase in MRB premiums was partially offset by reduced participation in the offshore energy and liability proportional account for the 2015 contract year. It is important to note that a premium adjustment made in 2014 is inflating the percentage increase reported for the third quarter of 2015. This adjustment stemmed from a change in the premium recognition period of two large facility contracts in the pro rata property line of business that was implemented in the third quarter of 2014. For the first nine months of 2015, premiums earned increased 5.9 percent (6.6 percent in the property and casualty insurance segment and 3.5 percent in the reinsurance segment).

Catastrophe and storm losses totaled $17.8 million ($0.56 per share after tax) in the third quarter of 2015, compared to $17.5 million ($0.56 per share after tax) in the third quarter of 2014. Third quarter catastrophe and storm losses accounted for 12.2 percentage points of the combined ratio, which is below the Company’s most recent 10-year average of 14.2 percentage points for this period and consistent with the 12.6 percentage points experienced in the third quarter of 2014. For the first nine months of 2015, catastrophe and storm losses totaled $40.8 million ($1.29 per share after tax), compared to $52.8 million ($1.70 per share after tax) in 2014. On a segment basis, catastrophe and storm losses amounted to $9.9 million ($0.31 per share after tax) and $28.7 million ($0.91 per share after tax) in the property and casualty insurance segment, and $7.9 million ($0.25 per share after tax) and $12.1 million ($0.38 per share after tax) in the reinsurance segment, for the three months and nine months ended September 30, 2015, respectively.

The Company reported $2.2 million ($0.07 per share after tax) of favorable development on prior years’ reserves during the third quarter of 2015, compared to $1.7 million ($0.06 per share after tax) in the third quarter of 2014. For the first nine months of 2015, favorable development totaled $20.0 million ($0.63 per share after tax), compared to $10.9 million ($0.35 per share after tax) in 2014. Development amounts can vary significantly from quarter to quarter and year to year depending on a number of factors, including the number of claims settled and the settlement terms, and should therefore not be considered a reliable factor in assessing the adequacy of the Company’s carried reserves. The most recent actuarial analysis of the Company’s carried reserves indicates that carried reserves remain within the top quartile of the range of reasonable reserves.

Large losses (which the Company defines as losses greater than $500,000 for the EMC Insurance Companies pool, excluding catastrophe and storm losses) increased slightly to $10.3 million ($0.32 per share after tax) in the third quarter of 2015 from $9.7 million ($0.31 per share after tax) in the third quarter of 2014. For the first nine months of 2015, large losses decreased to $21.5 million ($0.68 per share after tax) from $23.8 million ($0.77 per share after tax) in 2014.

Net investment income declined 1.8 percent and 1.4 percent to $11.3 million and $33.9 million for the three and nine months ended September 30, 2015 from $11.5 million and $34.4 million for the same periods in 2014. Net investment income for the first nine months of 2014 included approximately $442,000 that resulted from the early payoff of a commercial mortgage-backed security during the first quarter of 2014 that was purchased at a significant discount to par value, which accelerated the accretion of the discount to par value and therefore increased investment income. Excluding this amount, net investment income would have been relatively flat for the first nine months of 2015 compared to the same period in 2014.

Net realized investment gains totaled $7.5 million ($0.24 per share after tax) and $11.6 million ($0.37 per share after tax) for the third quarter and first nine months of 2015, compared to net realized investment losses of $390,000 ($0.01 per share after tax) and net realized investment gains of $3.2 million ($0.10 per share after tax) for the same periods in 2014. Included in net realized investment gains reported for the third quarter and first nine months of 2015 are $7.2 million and $3.8 million, respectively, of realized investment gains attributed to increases in the carrying value of a limited partnership that helps protect the Company from a sudden and significant decline in the value of its equity portfolio (the equity tail-risk hedging strategy). Included in the net realized investment gains/losses reported for the third quarter and first nine months of 2014 are $917,000 and $2.1 million, respectively, of net realized investment losses attributed to the decline in carrying value of this limited partnership.

At September 30, 2015, consolidated assets totaled $1.6 billion, including $1.4 billion in the investment portfolio, and stockholders’ equity totaled $519.9 million, an increase of 3.4 percent from December 31, 2014. Book value of the Company’s stock increased 1.5 percent to $25.09 per share from $24.72 per share at December 31, 2014. Book value excluding accumulated other comprehensive income increased to $22.16 per share from $20.70 per share at December 31, 2014.

The Company will hold an earnings teleconference call at noon Eastern time on November 6, 2015 to allow securities analysts, stockholders and other interested parties the opportunity to hear management discuss the Company’s results for the quarter and nine months ended September 30, 2015, as well as its expectations for the remainder of 2015. Dial-in information for the call is toll-free 1-877-407-9205 (International: 1-201-689-8054).

Members of the news media, investors and the general public are invited to access a live webcast of the conference call via the Company’s investor relations page at www.emcins.com/ir. The webcast will be archived and available for replay until February 6, 2015. A transcript of the teleconference will also be available on the Company’s website shortly after the completion of the teleconference.

About EMCI:

EMC Insurance Group Inc. is a publicly held insurance holding company with operations in property and casualty insurance and reinsurance, which was formed in 1974 and became publicly held in 1982. The Company’s common stock trades on the Global Select Market tier of the NASDAQ OMX Stock Market under the symbol EMCI. Additional information regarding EMC Insurance Group Inc. may be found at www.emcins.com/ir. EMCI’s parent company is Employers Mutual Casualty Company (EMCC). EMCI and EMCC, together with their subsidiary and affiliated companies, conduct operations under the trade name EMC Insurance Companies.

Cautionary Note Regarding Forward-Looking Statements:

The Private Securities Litigation Reform Act of 1995 provides issuers the opportunity to make cautionary statements regarding forward-looking statements. Accordingly, any forward-looking statement contained in this report is based on management’s current beliefs, assumptions and expectations of the Company’s future performance, taking into account all information currently available to management. These beliefs, assumptions and expectations can change as the result of many possible events or factors, not all of which are known to management. If a change occurs, the Company’s business, financial condition, liquidity, results of operations, plans and objectives may vary materially from those expressed in the forward-looking statements.

The risks and uncertainties that may affect the actual results of the Company include, but are not limited to, the following:

  • catastrophic events and the occurrence of significant severe weather conditions;
  • the adequacy of loss and settlement expense reserves;
  • state and federal legislation and regulations;
  • changes in the property and casualty insurance industry, interest rates or the performance of financial markets and the general economy;
  • rating agency actions;
  • “other-than-temporary” investment impairment losses; and
  • other risks and uncertainties inherent to the Company’s business, including those discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K.

Management intends to identify forward-looking statements when using the words “believe,” “expect,” “anticipate,” “estimate,” “project,” or similar expressions. Undue reliance should not be placed on these forward-looking statements. The Company disclaims any obligation to update such statements or to announce publicly the results of any revisions that it may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

¹The Company prepares its public financial statements in conformity with accounting principles generally accepted in the Unites States of America (GAAP). Operating income is a non-GAAP financial measure, calculated by excluding net realized investment gains/losses from net income. The Company’s calculation of operating income may differ from similar measures used by other companies, so investors should exercise caution when comparing the Company’s measure of operating income to the measure of other companies. Management’s projected operating income guidance is also considered a non-GAAP financial measure. 

Management believes operating income is useful to investors because it illustrates the performance of our normal, ongoing operations, which is important in understanding and evaluating our financial condition and results of operations. While this measure is consistent with measures utilized by investors to evaluate performance, it is not a substitute for the GAAP financial measure of net income. Therefore, the Company has provided the following reconciliation of the non-GAAP financial measure of operating income to the GAAP financial measure of net income. Management also uses non-GAAP financial measures for goal setting, determining employee and senior management awards and compensation, and evaluating performance.

The reconciliation of operating income to net income is as follows: 

        
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2015   2014   2015   2014 
($ in thousands)       
Operating income$  6,315  $  2,482  $  32,756  $  11,748 
Net realized investment gains (losses)   4,874     (253)    7,511     2,090 
Net income $  11,189  $  2,229  $  40,267  $  13,838 
        


CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED       
($ in thousands, except share and per share amounts)         
  Property and        
  Casualty   Parent    
Quarter Ended September 30, 2015 Insurance Reinsurance Company Consolidated 
Revenues:         
Premiums earned $  113,753  $  32,035  $  -  $  145,788  
Investment income, net    8,125     3,176     (2)    11,299  
Other income    210     309     -     519  
     122,088     35,520     (2)    157,606  
Losses and expenses:        
Losses and settlement expenses    75,976     26,709     -     102,685  
Dividends to policyholders    3,555     -     -     3,555  
Amortization of deferred policy acquisition costs    18,736     7,403     -     26,139  
Other underwriting expenses    15,587     458     -     16,045  
Interest expense     84     -     -     84  
Other expenses    196     -     479     675  
     114,134     34,570     479     149,183  
Operating income (loss) before income taxes    7,954     950     (481)    8,423  
Realized investment gains    4,889     2,609     -     7,498  
Income (loss) before income taxes    12,843     3,559     (481)    15,921  
Income tax expense (benefit):        
Current    2,743     507     (169)    3,081  
Deferred    1,235     416     -     1,651  
     3,978     923     (169)    4,732  
Net Income (loss) $  8,865  $  2,636  $  (312) $  11,189  
Average shares outstanding         20,684,890  
Per Share Data:        
Net income (loss) per share - basic and diluted    $  0.43  $  0.12  $  (0.01) $  0.54  
Catastrophe and storm losses (after tax)    $  0.31  $  0.25  $  -  $  0.56  
Large losses* (after tax) $  0.32  $  -  $  -  $  0.32  
Reported (adverse) favorable development        
experienced on prior years' reserves (after tax)   $  0.15  $  (0.08) $  -  $  0.07  
Dividends per share         $  0.170  
Other Information of Interest:        
Net written premiums    $  134,722  $  31,446  $  -  $  166,168  
Catastrophe and storm losses    $  9,920  $  7,844  $  -  $  17,764  
Large losses* $  10,304  $  -  $  -  $  10,304  
Reported adverse (favorable) development         
experienced on prior years' reserves    $  (4,722) $  2,495  $  -  $  (2,227) 
GAAP Ratios:        
Loss and settlement expense ratio  66.8%  83.4%    -   70.4% 
Acquisition expense ratio  33.3%  24.5%    -   31.4% 
Combined ratio  100.1%  107.9%    -   101.8% 
          
*Large losses are defined as losses greater than $500 for the EMC Insurance Companies pool, excluding catastrophe and storm losses. 

 

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED       
($ in thousands, except share and per share amounts)         
  Property and        
  Casualty   Parent    
Quarter Ended September 30, 2014 Insurance Reinsurance Company Consolidated 
Revenues:         
Premiums earned $  107,952  $  30,364  $  -  $  138,316  
Investment income, net    8,230     3,275     (2)    11,503  
Other income    202     1,028     -     1,230  
     116,384     34,667     (2)    151,049  
Losses and expenses:        
Losses and settlement expenses    78,556     28,096     -     106,652  
Dividends to policyholders    2,588     -     -     2,588  
Amortization of deferred policy acquisition costs    18,143     6,814     -     24,957  
Other underwriting expenses    13,079     828     -     13,907  
Interest expense     84     -     -     84  
Other expenses    132     -     456     588  
     112,582     35,738     456     148,776  
Operating income (loss) before income taxes    3,802     (1,071)    (458)    2,273  
Realized investment losses    (286)    (104)    -     (390) 
Income (loss) before income taxes    3,516     (1,175)    (458)    1,883  
Income tax expense (benefit):        
Current    (304)    (988)    (160)    (1,452) 
Deferred    759     347     -     1,106  
     455     (641)    (160)    (346) 
Net Income (loss) $  3,061  $  (534) $  (298) $  2,229  
Average shares outstanding         20,267,538  
Per Share Data:        
Net income (loss) per share - basic and diluted    $  0.15  $  (0.03) $  (0.01) $  0.11  
Catastrophe and storm losses (after tax)    $  0.32  $  0.24  $  -  $  0.56  
Large losses* (after tax) $  0.31  $  -  $  -  $  0.31  
Reported favorable development        
experienced on prior years' reserves (after tax)   $  0.02  $  0.04  $  -  $  0.06  
Dividends per share         $  0.153  
Other Information of Interest:        
Net written premiums    $  131,005  $  31,824  $  -  $  162,829  
Catastrophe and storm losses    $  10,064  $  7,415  $  -  $  17,479  
Large losses* $  9,673  $  -  $  -  $  9,673  
Reported favorable development         
experienced on prior years' reserves    $  (427) $  (1,264) $  -  $  (1,691) 
GAAP Ratios:        
Loss and settlement expense ratio  72.8%  92.5%    -   77.1% 
Acquisition expense ratio  31.3%  25.2%    -   30.0% 
Combined ratio  104.1%  117.7%    -   107.1% 
          
*Large losses are defined as losses greater than $500 for the EMC Insurance Companies pool, excluding catastrophe and storm losses. 

 

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED       
($ in thousands, except share and per share amounts)         
  Property and        
  Casualty   Parent    
Nine Months Ended September 30, 2015 Insurance Reinsurance Company Consolidated 
Revenues:         
Premiums earned  $  333,212  $  95,912  $  -  $  429,124  
Investment income, net       24,301     9,654     (9)    33,946  
Other income       582     1,040     -     1,622  
     358,095     106,606     (9)    464,692  
Losses and expenses:        
Losses and settlement expenses       215,468     65,135     -     280,603  
Dividends to policyholders       6,492     -     -     6,492  
Amortization of deferred policy acquisition costs       56,003     22,820     -     78,823  
Other underwriting expenses       47,784     2,567     -     50,351  
Interest expense       253     -     -     253  
Other expenses     568     -     1,424     1,992  
     326,568     90,522     1,424     418,514  
Operating income (loss) before income taxes       31,527     16,084     (1,433)    46,178  
Realized investment gains       7,866     3,689     -     11,555  
Income (loss) before income taxes       39,393     19,773     (1,433)    57,733  
Income tax expense (benefit):        
Current     10,513     5,583     (502)    15,594  
Deferred     1,312     560     -     1,872  
     11,825     6,143     (502)    17,466  
Net income (loss)  $  27,568  $  13,630  $  (931) $  40,267  
Average shares outstanding            20,577,493  
Per Share Data:        
Net income (loss) per share - basic and diluted    $  1.34  $  0.66  $  (0.04) $  1.96  
Catastrophe and storm losses (after tax)    $  0.91  $  0.38  $  -  $  1.29  
Large losses* (after tax) $  0.68  $  -  $  -  $  0.68  
Reported favorable development experienced on        
prior years' reserves (after tax) $  0.45  $  0.18  $  -  $  0.63  
Dividends per share         $  0.503  
Book value per share         $  25.09  
Effective tax rate          30.3% 
Annualized net income as a percent of beg. SH equity        10.7% 
Other Information of Interest:        
Net written premiums    $  364,329  $  96,914  $  -  $  461,243  
Catastrophe and storm losses    $  28,651  $  12,104  $  -  $  40,755  
Large losses* $  21,453  $  -  $  -  $  21,453  
Reported favorable development experienced on         
prior years' reserves $  (14,177) $  (5,780) $  -  $  (19,957) 
GAAP Ratios:        
Loss and settlement expense ratio  64.7%  67.9%    -   65.4% 
Acquisition expense ratio  33.1%  26.5%    -   31.6% 
Combined ratio  97.8%  94.4%    -   97.0% 
          
*Large losses are defined as losses greater than $500 for the EMC Insurance Companies pool, excluding catastrophe and storm losses. 

 

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED       
($ in thousands, except share and per share amounts)         
  Property and        
  Casualty   Parent    
Nine Months Ended September 30, 2014 Insurance Reinsurance Company Consolidated 
Revenues:         
Premiums earned $  312,716  $  92,632  $  -  $  405,348  
Investment income, net    24,818     9,624     (8)    34,434  
Other income    584     1,042     -     1,626  
     338,118     103,298     (8)    441,408  
Losses and expenses:        
Losses and settlement expenses    227,069     74,398     -     301,467  
Dividends to policyholders    6,517     -     -     6,517  
Amortization of deferred policy acquisition costs    53,895     20,795     -     74,690  
Other underwriting expenses    41,103     1,838     -     42,941  
Interest expense     253     -     -     253  
Other expenses    540     -     1,173     1,713  
     329,377     97,031     1,173     427,581  
Operating income (loss) before income taxes    8,741     6,267     (1,181)    13,827  
Realized investment gains    2,293     922     -     3,215  
Income (loss) before income taxes    11,034     7,189     (1,181)    17,042  
Income tax expense (benefit):        
Current    1,546     1,716     (414)    2,848  
Deferred    315     41     -     356  
     1,861     1,757     (414)    3,204  
Net Income (loss) $  9,173  $  5,432  $  (767) $  13,838  
Average shares outstanding         20,165,697  
Per Share Data:        
Net income (loss) per share - basic and diluted    $  0.46  $  0.27  $  (0.04) $  0.69  
Catastrophe and storm losses (after tax)    $  1.24  $  0.46  $  -  $  1.70  
Large losses* (after tax) $  0.77  $  -  $  -  $  0.77  
Reported favorable development        
experienced on prior years' reserves (after tax)   $  0.20  $  0.15  $  -  $  0.35  
Dividends per share         $  0.460  
Book value per share         $  23.93  
Effective tax rate          18.8% 
Annualized net income as a percent of beg. SH equity        3.9% 
Other Information of Interest:        
Net written premiums    $  345,982  $  91,276  $  -  $  437,258  
Catastrophe and storm losses    $  38,501  $  14,335  $  -  $  52,836  
Large losses* $  23,782  $  -  $  -  $  23,782  
Reported favorable development         
experienced on prior years' reserves    $  (6,106) $  (4,816) $  -  $  (10,922) 
GAAP Ratios:        
Loss and settlement expense ratio  72.6%  80.3%    -   74.4% 
Acquisition expense ratio  32.5%  24.4%    -   30.6% 
Combined ratio  105.1%  104.7%    -   105.0% 
          
*Large losses are defined as losses greater than $500 for the EMC Insurance Companies pool, excluding catastrophe and storm losses. 

 

CONSOLIDATED BALANCE SHEETS    
 September 30, December 31, 
  2015   2014  
($ in thousands, except share and per share amounts)(Unaudited)   
ASSETS    
Investments:    
Fixed maturity securities available-for-sale, at fair value    
(amortized cost $1,139,373 and $1,080,006)$  1,177,961  $  1,127,499  
Equity securities available-for-sale, at fair value    
(cost $142,941 and $123,972)   194,305     197,036  
Other long-term investments   15,396     6,227  
Short-term investments   32,798     53,262  
Total investments   1,420,460     1,384,024  
     
Cash   570     383  
Reinsurance receivables due from affiliate   25,399     28,603  
Prepaid reinsurance premiums due from affiliate   7,638     8,865  
Deferred policy acquisition costs (affiliated $44,559 and $38,930)   44,710     39,343  
Prepaid pension and postretirement benefits due from affiliate   18,162     17,360  
Accrued investment income   11,716     10,295  
Amounts receivable under reverse repurchase agreements   16,850     -   
Accounts receivable   1,402     1,767  
Income taxes recoverable   2,657     -  
Goodwill   942     942  
Other assets (affiliated $4,611 and $4,900)   5,019     6,238  
Total assets$  1,555,525  $  1,497,820  
     
LIABILITIES    
Losses and settlement expenses (affiliated $675,247 and $650,652)$  683,930  $  661,309  
Unearned premiums (affiliated $263,096 and $230,460)   263,686     232,093  
Other policyholders' funds (all affiliated)   8,593     10,153  
Surplus notes payable to affiliate   25,000     25,000  
Amounts due affiliate to settle inter-company transaction balances   7,347     8,559  
Pension benefits payable to affiliate   4,082     4,162  
Income taxes payable   -     3  
Deferred income taxes   19,295     28,654  
Other liabilities (affiliated $23,547 and $23,941)   23,659     25,001  
Total liabilities   1,035,592     994,934  
     
STOCKHOLDERS' EQUITY     
Common stock, $1 par value, authorized 30,000,000    
shares; issued and outstanding, 20,720,855    
shares in 2015 and 20,344,409 shares in 2014   20,721     20,344  
Additional paid-in capital   107,426     99,891  
Accumulated other comprehensive income   60,804     81,662  
Retained earnings   330,982     300,989  
Total stockholders' equity   519,933     502,886  
Total liabilities and stockholders' equity$  1,555,525  $  1,497,820  

 

LOSS AND SETTLEMENT EXPENSE BY LINE OF BUSINESS        
  Three months ended September 30,
   2015   2014 
($ in thousands) Premiums
earned
 Losses and
settlement
expenses
 Loss and
settlement
expense ratio
 Premiums
earned
 Losses and
settlement
expenses
 Loss and
settlement
expense ratio
Property and casualty insurance            
Commercial lines:            
Automobile $  27,080  $  24,555     90.7% $  25,000  $  21,974     87.9%
Property    26,526     19,290     72.7%    25,111     18,191     72.4%
Workers' compensation    23,777     12,098     50.9%    22,209     11,582     52.2%
Liability    23,449     10,726     45.7%    22,090     18,450     83.5%
Other    2,032     348     17.1%    1,881     220     11.7%
Total commercial lines    102,864     67,017     65.2%    96,291     70,417     73.1%
             
Personal lines:            
Automobile    5,717     4,717     82.5%    6,284     4,287     68.2%
Homeowners    5,172     4,242     82.0%    5,377     3,852     71.6%
Total personal lines    10,889     8,959     82.3%    11,661     8,139     69.8%
Total property and casualty            
insurance $  113,753  $  75,976     66.8% $  107,952  $  78,556     72.8%
             
Reinsurance            
Pro rata reinsurance:            
Multiline (primarily property) $  1,190  $  747     62.8% $  700  $  957     136.8%
Property    4,162     3,894     93.6%    2,622     3,838     146.4%
Liability    4,787     3,137     65.6%    3,148     1,289     40.9%
Marine    2,898     1,889     65.2%    3,502     3,576     102.1%
Total pro rata reinsurance    13,037     9,667     74.2%    9,972     9,660     96.9%
             
Excess of loss reinsurance:            
Property    16,249     13,524     83.2%    17,248     16,108     93.4%
Liability    2,749     3,518     128.0%    3,144     2,328     74.1%
Total excess of loss reinsurance    18,998     17,042     89.7%    20,392     18,436     90.0%
Total reinsurance $  32,035  $  26,709     83.4% $  30,364  $  28,096     92.5%
             
Consolidated $  145,788  $  102,685     70.4% $  138,316  $  106,652     77.1%

 

LOSS AND SETTLEMENT EXPENSE BY LINE OF BUSINESS        
  Nine months ended September 30,
   2015   2014 
($ in thousands) Premiums
earned
 Losses and
settlement
expenses
 Loss and
settlement
expense ratio
 Premiums
earned
 Losses and
settlement
expenses
 Loss and
settlement
expense ratio
Property and casualty insurance            
Commercial lines:            
Automobile $  78,698  $  61,843     78.6% $  71,657  $  56,864     79.4%
Property    77,518     53,652     69.2%    71,756     57,891     80.7%
Workers' compensation    69,150     39,591     57.3%    65,172     38,131     58.5%
Liability    68,952     34,668     50.3%    63,600     42,957     67.5%
Other    6,044     794     13.1%    5,472     705     12.9%
Total commercial lines    300,362     190,548     63.4%    277,657     196,548     70.8%
             
Personal lines:            
Automobile    17,313     12,013     69.4%    18,999     14,473     76.2%
Homeowners    15,537     12,907     83.1%    16,060     16,048     99.9%
Total personal lines    32,850     24,920     75.9%    35,059     30,521     87.1%
Total property and casualty            
insurance $  333,212  $  215,468     64.7% $  312,716  $  227,069     72.6%
             
Reinsurance            
Pro rata reinsurance:            
Multiline (primarily property) $  4,584  $  1,180     25.7% $  5,031  $  3,570     71.0%
Property    11,877     13,151     110.7%    9,929     10,112     101.8%
Liability    13,955     8,701     62.4%    8,661     4,983     57.5%
Marine    9,738     436     4.5%    11,721     6,700     57.2%
Total pro rata reinsurance    40,154     23,468     58.4%    35,342     25,365     71.8%
             
Excess of loss reinsurance:            
Property    46,425     32,041     69.0%    48,507     47,240     97.4%
Liability    9,333     9,626     103.1%    8,783     1,793     20.4%
Total excess of loss reinsurance    55,758     41,667     74.7%    57,290     49,033     85.6%
Total reinsurance $  95,912  $  65,135     67.9% $  92,632  $  74,398     80.3%
             
Consolidated $  429,124  $  280,603     65.4% $  405,348  $  301,467     74.4%

 

NET WRITTEN PREMIUMS          
 Three months ended  Three months ended    
 September 30, 2015 September 30, 2014   
   Percent of   Percent of Change in 
 Written net written Written net written net written 
($ in thousands)premiums premiums premiums premiums premiums 
Property and casualty insurance          
Commercial lines:          
Automobile$  28,904     17.4% $  27,792     17.1%    4.0% 
Property   32,891     19.8%    31,735     19.5%    3.6% 
Workers' compensation   33,385     20.1%    32,236     19.8%    3.6% 
Liability   26,556     16.0%    25,072     15.4%    5.9% 
Other   2,213     1.3%    2,352     1.4%    (5.9)% 
Total commercial lines   123,949     74.6%    119,187     73.2%    4.0% 
           
Personal lines:          
Automobile   5,333     3.2%    5,962     3.7%    (10.5)% 
Homeowners   5,440     3.3%    5,856     3.6%    (7.1)% 
Total personal lines   10,773     6.5%    11,818     7.3%    (8.8)% 
Total property and           
casualty insurance$  134,722     81.1% $  131,005     80.5%    2.8% 
           
Reinsurance          
Pro rata reinsurance:          
Multiline (primarily property)$  930     0.6% $  1,228     0.8%    (24.3)% 
Property   4,678     2.8%    2,172     1.3%    115.4% 
Liability   5,925     3.6%    3,351     2.1%    76.8% 
Marine   570     0.3%    3,980     2.4%    (85.7)% 
Total pro rata reinsurance   12,103     7.3%    10,731     6.6%    12.8% 
           
Excess of loss reinsurance:          
Property   16,614     10.0%    17,929     11.0%    (7.3)% 
Liability   2,729     1.6%    3,164     1.9%    (13.7)% 
Total excess of loss reinsurance   19,343     11.6%    21,093     12.9%    (8.3)% 
Total reinsurance$  31,446     18.9% $  31,824     19.5%    (1.2)% 
           
Consolidated$  166,168   100.0% $  162,829   100.0%    2.1% 
           
           
           
NET WRITTEN PREMIUMS          
 Nine months ended  Nine months ended    
 September 30, 2015 September 30, 2014   
   Percent of   Percent of Change in 
 Written net written Written net written net written 
($ in thousands)premiums premiums premiums premiums premiums 
Property and casualty insurance          
Commercial lines:          
Automobile$  86,947     18.9% $  80,335     18.4%    8.2% 
Property   85,853     18.6%    80,992     18.5%    6.0% 
Workers' compensation   76,912     16.7%    73,703     16.9%    4.4% 
Liability   75,765     16.4%    70,366     16.1%    7.7% 
Other   6,413     1.4%    5,907     1.3%    8.6% 
Total commercial lines   331,890     72.0%    311,303     71.2%    6.6% 
           
Personal lines:          
Automobile   16,944     3.7%    18,583     4.2%    (8.8)% 
Homeowners   15,495     3.3%    16,096     3.7%    (3.7)% 
Total personal lines   32,439     7.0%    34,679     7.9%    (6.5)% 
Total property and           
casualty insurance$  364,329     79.0% $  345,982     79.1%    5.3% 
           
Reinsurance          
Pro rata reinsurance:          
Multiline (primarily property)$  3,194     0.7% $  5,210     1.2%    (38.7)% 
Property   11,361     2.4%    8,364     1.9%    35.8% 
Liability   19,271     4.2%    9,798     2.3%    96.7% 
Marine   6,406     1.4%    9,768     2.2%    (34.4)% 
Total pro rata reinsurance   40,232     8.7%    33,140     7.6%    21.4% 
           
Excess of loss reinsurance:          
Property   47,356     10.3%    49,342     11.3%    (4.0)% 
Liability   9,326     2.0%    8,794     2.0%    6.1% 
Total excess of loss reinsurance   56,682     12.3%    58,136     13.3%    (2.5)% 
Total reinsurance$  96,914     21.0% $  91,276     20.9%    6.2% 
           
Consolidated$  461,243   100.0% $  437,258   100.0%    5.5% 

 

Contact:Steve Walsh (Investors)515-345-2515Lisa Hamilton (Media)515-345-7589

Source:EMC Insurance Group Inc.